As a trader you need to know what margin is, how to anticipate it and how to meet the requirements without risking a margin call. Here you learn everything!
Created by Tradimo.
About this course
The goal of this margin course is to help investors and traders understand what margin trading is, how it can be used to leverage trading profits, and what the risks of margin trading entail.
Margin Trading and Investing: Leverage, Profit and Risk
In the investing world, “margin” refers to an investor using money borrowed from a broker to buy securities. An investor “buying on margin,” pays for part of an asset purchase, while the broker loans the remainder.
The broker making the loan then uses the assets in the investor’s account as collateral -- if the securities purchased decline in price, and the value of the account drops, the broker can sell some of the client’s assets to repay the loan.
The Margin Requirement is the percentage of a purchase that an investor is required by the broker or exchange to pay for in cash. So 50% margin means the investor pays for 50% of the cost of a purchase, and the broker lends the rest.
What This Margin Trading Course Will Help You Learn:
How to use a margin account to borrow money from a broker and buy extra shares or positions
How margin grants leverage and allows you to amplify gains
How excessive use of margin can lead to big losses
The difference between initial and maintenance margin requirements
The different ways various exchanges calculate margin and grant leverage
How certain strategies allow the trader to minimize the risks of margin trading
Risk warning: Trading in financial instruments carries a high level of risk to your capital with the possibility of losing more than your initial investment. Trading in financial instruments may not be suitable for all investors, and is only intended for people over 18. Please ensure that you are fully aware of the risks involved and, if necessary, seek independent financial advice. The educational content on Tradimo is presented for educational purposes only and does not constitute financial advice.